SAN JOSE, Calif. — Apple Inc. is refusing to stoop to the level of its rivals in the tablet market —it’s pricing its new, smaller iPad well above the competition.

On Tuesday, the company revealed the iPad Mini, with a screen that’s about two-thirds the size of the full-size model, and said it will cost $329 and up.

Apple starts taking orders for the new model on Friday Oct. 26, said marketing chief Phil Schiller at an event in San Jose, Calif. Wi-Fi-only models on Nov. 2. Later, the company will add models capable of accessing “LTE” wireless data networks.

The price fits into the Apple product lineup between the iPad 2 at $399 and the latest version of the iPod touch at $299. But company watchers had been expecting Apple to price the iPad Mini at $250 to $300 to counter the threat of less expensive tablets like Amazon.com Inc.’s Kindle Fire, which starts at $159.

Apple shares fell $14.83, or 2.3 percent, to $619.20 when the price was announced. Shares of Amazon.com Inc. were down 12 cents, or less than 0.1 percent, at $233.66 while the rest of the stock market was in retreat.

The iPad mini weighs 0.68 pounds, half as much as the full-size iPad, and is as thin as a pencil, Schiller said.

The screen resolution is 1024 by 768 pixels, the same as the iPad 2 and a quarter of the resolution of the third-generation iPad. Like the iPad and iPhone, it was two cameras, one on the front and one on the back.

“It’s not just a shrunken-down iPad, it’s an entirely new design,” Schiller said.

Company watchers have been expecting the iPad Mini for a year, and most of the details, except the price, had leaked out. More surprisingly, Apple also said it’s upgrading its full-size iPad tablet just six months after launching a new model, doubling the speed of the processor. Previously, the company has updated the iPad once a year.

The fourth-generation iPad will have a better camera and work on more “LTE” wireless data networks around the world. Apple is also replacing the 30-pin dock connector with the new, smaller “Lightning” connector introduced with the iPhone 5 a month ago.

The price of the new full-size model stays the same as the previous version, starting at $499 for a Wi-Fi-only version with 16 gigabytes of memory.

Apple has sold more than 100 million iPads since April 2010.

Here's a running account of Apple's event, presented in reverse chronological order. All times are PDT. Presenters include Apple CEO Tim Cook and Philip Schiller, the senior vice president for worldwide marketing.

11:10 a.m.

Advance orders for the iPad Mini and the new full-sized iPad will begin Friday. They will be available for sale Nov. 2.

The $329 price puts the Mini between the 2011 full-sized iPad model at $399 and the 4-inch iPod Touch at $199. By contrast, Amazon.com Inc.'s Kindle Fire starts at $159, and Google Inc.'s Nexus 7 at $199. Both have 7-inch screens.

There's also a version that will be capable of using cellular networks. That will go on sale two weeks later. That's a feature the cheaper, 7-inch tablets don't have.

11:05 a.m.

The new iPad Mini starts at $329, which makes it more expensive than rival, 7-inch products.

10:55 a.m.

The smaller iPad has a 7.9-inch screen, digitally reversed from the full-sized iPad's 9.7 inches.

Schiller said all of the software designed for the original iPad will work on the smaller one, as the display is 1024 by 768 pixels -- the same as the original iPad.

The latest, full-sized iPad has a sharper screen at 2048 by 1536 pixels.

10:52 a.m.

After much anticipation, Schiller unveils the iPad Mini.

"You can hold it in one hand," he said. It's not just a shrunken down iPad. It's an entirely new design."

10:50 a.m.

Apple unveiled a new iPad, but it's a full-sized version -- an update to the third-generation device that went on sale in March. It promises a faster processing chip and faster wireless Wi-Fi connectivity.

It will also sport the new connector that Apple unveiled with the new iPhone 5 last month. Apple says the new connector helps the company keep up with modern times, but it also requires consumers to buy new accessories or an adapter.

Prices remain the same, starting at $499.

10:45 a.m.

Apple says it sold its 100 millionth iPad two weeks ago. That means it sold about 16 million since the end of the second quarter, the last time it released a figure.Cook discussed how teachers have been using iPads in their classrooms and said electronic textbooks through iBooks are now available for 80 percent of the high school curriculum. It was a sign Apple was looking to challenge Amazon.com Inc., which has been pushing textbooks on its Kindle devices.

10:40 a.m.

The audience cheered as Schiller unveiled new iMac computers. It looks like a super-thin display screen, but Schiller noted that "there is an entire computer in here."

There will be models with Apple's new fusion drive. That's a combination of the traditional, spinning hard drive and one using "flash" memory. Flash is faster, but capacity is smaller. Schiller says the fusion drive will have the speed of flash and the capacity of regular hard drives.

They will come in two display sizes. The 21.5-inch version starts at $1,299, and the larger one at $1,799. They will be available in December.

As he introduced the new iMacs, he showed on a giant display how the iMac has shrunk over the years.

10:25 a.m.

Schiller teased audience by talking about the Mac Mini, not an iPad Mini.

"You knew there would be something called `mini' in this presentation," he said to laughter.

A new Mac Mini starts at $599 and comes with 4 gigabytes of RAM, or working memory, and a 500 GB hard drive for storage. A $999 version comes with a terabyte hard drive, or double the capacity.

10:20 a.m.

After touting growth in Mac computers at a time when sales of Windows-based machines are slowing, Apple introduced a new MacBook. In June, Apple introduced a MacBook Pro that is about as thin as its already-slim MacBook Air, but with a sharper display. That model had a 15.4-inch screen.

At Tuesday's event, Schiller unveiled a smaller version, with a screen of 13.3 inches. He noted that the 13.3-inch MacBook Pro that Apple already makes has been the company's top-selling laptop. The new version adds the sharper display and is thinner and lighter than the regular MacBook Pro.

"In typical Apple fashion, we are going to take our best product and introduce something better and much cooler," he said.

The starting price is $1,699.

10:15 a.m.

Cook began the presentation with a customary update on past products.

Cook talked about the success of the iPhone 5 and the new iPod Touch, both released last month. He said there have been 3 million iPod Touches sold.

He also talked about an upgrade to Apple's software for mobile devices, iOS 6. He said there were now 200 million devices running iOS 6.

He said the app store had more than 700,000 apps, including 275,000 for the iPad. Customers have downloaded more than 35 billion apps, he said.

He touted an e-book app called iBooks and announced a new version with a new reading option: continuous scrolling. With that, you keep scrolling down the screen rather than flip pages to keep reading. You can also tap on a quote to share instantly on Facebook or Twitter.

10 a.m.

The event opens with Cook appearing on stage. "We have some fond memories here, and we're going to create a few more today," he told the audience.